Wednesday, June 10, 2009

Comment on The Belmont Club,
"Systemic risk"

Outside questioners are a key to the health of any bureaucratic system. Government can provide this function but not if it is also providing the service being inspected. Within a corporation the inspecting oxygen can be provided in part by the general public in their roles as shareholders who can question management in a public meeting. The deep and overriding contempt that most professional employees of large organizations such as banks have for the shareholders is a fact. Most Annual Reports are carefully crafted like a magician's trick to obscure more than they reveal. The Annual Meeting is a painful and inconvenient ritual that would be scheduled for a Tuesday morning on Diego Garcia if management could get away with it. The American Red Cross has actually moved it's meeting into an online format, with proclamations as to how much more convenient this is for all concerned. No need to worry about any public demonstrations or having the Directors embarrassed before an audience. We can expect that trend to spread like wildfire.

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